Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
We kickoff the day with NFIB Business Optimism Index at 5:00 A.M., Redbook YoY at 7:55 A.M., Fed Barr Speech at 8:15 A.M., Fed Chair Powell Testimony at 9:00 A.M., NY Fed Treasury Purchases 10-22.5 yrs. at 9:30 A.M., 42-Day Bill Auction and 52-Week Bill Auction at 10:30 A.M., 3-Year Note Auction at 12:00 P.M., Fed Bowman Speech at 12:30 P.M., API Energy Stocks, Used Car Prices MoM & YoY, and Treasury Secretary Yellen Testimony at 3:30 P.M.
The delayed Commitment of Traders report showed that funds were large sellers in ag commodity market in the week ending July 2nd . Funds sold 59,000 contracts of corn, 14,000 contracts in soybean meal, and over 11,000 contracts in soybeans. Across all 3 wheat exchanges funds sold 18,000 contracts. Funds bought 47,000 contracts in soybean oil, 7,500 contracts in live cattle, and 1,400 contracts in feeders. Across the 10 principal ag markets, funds sold over 46,000 contracts and were net short nearly 547,000 contracts. Funds net short in agriculture markets is testing the record lows scored earlier this year, waiting for a new fundamental reason to exit. Looking backwards, it’s managed money positioning that moves price.
Beryl to Provide Needed Rain to E Midwest; Outlook Elsewhere Warm/Dry into July 23rd: Tropical Depression Beryl northeasterly move bodes favorably for IL, IN, OH, and KY. There’s broad agreement that rainfall of 1-3” impacts this region over the next 72 hours, and this follows the recent develop of abnormal dryness/moderate drought east of the Mississippi River. Coming rain is timely. Yet outside this narrow band a lengthy period of net drying is forecast and the GFS model project no major changes over the next week, but late July details are important. Operational models agree that dryness and warming temps are most probable into July 23rd . Any additional tropical activity in July is projected to favor the east coast. The 2024 growing season is just nearing its halfway mark.
No Relief Offered to Black Sea Next 10 Days; Temps Warm Further as Mid-Summer Approaches: A stagnant pattern of heat and dryness will be ongoing in E Europe, Ukraine, and much of Russia into July 17th . 11-155 day guidance lacks any hint of a pattern change, and so adversity is expected to cover nearly all of corns pollination there. The EU model’s latest 10-day precipitation forecast is not promising. Temps expected to reach into the upper 80’s/upper 90’s this week and will consistently be in the 90’s throughout the 6-10 day period. Ukraine is most concerning, but Russia has become a modest exporter of corn to neighboring destinations in recent years. Extreme heat favors Romania after July 15th . The market’s fixation on Central US weather in July must be expected, but numerous supply issues are present elsewhere across the world. CBOT open interest surged on Monday’s decline with corn up 18,706 contracts, Chicago wheat up 4,477 contracts while soybeans rose 2,648 contracts. New short positions were entered across the CBOT grain complex, except that soybean oil open interest fell 4,218 contracts on short covering. We are closing in on the fundamental summit as US corn and soybean good-to-excellent ratings rose 1%. 24% of the US corn crop is pollinating with 34% of the soybean crop in bloom.
Excessive Heat & No Electricity After Beryl. The Corn & Ethanol Report 07/09/2024
We kickoff the day with NFIB Business Optimism Index at 5:00 A.M., Redbook YoY at 7:55 A.M., Fed Barr Speech at 8:15 A.M., Fed Chair Powell Testimony at 9:00 A.M., NY Fed Treasury Purchases 10-22.5 yrs. at 9:30 A.M., 42-Day Bill Auction and 52-Week Bill Auction at 10:30 A.M., 3-Year Note Auction at 12:00 P.M., Fed Bowman Speech at 12:30 P.M., API Energy Stocks, Used Car Prices MoM & YoY, and Treasury Secretary Yellen Testimony at 3:30 P.M.
The delayed Commitment of Traders report showed that funds were large sellers in ag commodity market in the week ending July 2nd . Funds sold 59,000 contracts of corn, 14,000 contracts in soybean meal, and over 11,000 contracts in soybeans. Across all 3 wheat exchanges funds sold 18,000 contracts. Funds bought 47,000 contracts in soybean oil, 7,500 contracts in live cattle, and 1,400 contracts in feeders. Across the 10 principal ag markets, funds sold over 46,000 contracts and were net short nearly 547,000 contracts. Funds net short in agriculture markets is testing the record lows scored earlier this year, waiting for a new fundamental reason to exit. Looking backwards, it’s managed money positioning that moves price.
Beryl to Provide Needed Rain to E Midwest; Outlook Elsewhere Warm/Dry into July 23rd: Tropical Depression Beryl northeasterly move bodes favorably for IL, IN, OH, and KY. There’s broad agreement that rainfall of 1-3” impacts this region over the next 72 hours, and this follows the recent develop of abnormal dryness/moderate drought east of the Mississippi River. Coming rain is timely. Yet outside this narrow band a lengthy period of net drying is forecast and the GFS model project no major changes over the next week, but late July details are important. Operational models agree that dryness and warming temps are most probable into July 23rd . Any additional tropical activity in July is projected to favor the east coast. The 2024 growing season is just nearing its halfway mark.
No Relief Offered to Black Sea Next 10 Days; Temps Warm Further as Mid-Summer Approaches: A stagnant pattern of heat and dryness will be ongoing in E Europe, Ukraine, and much of Russia into July 17th . 11-155 day guidance lacks any hint of a pattern change, and so adversity is expected to cover nearly all of corns pollination there. The EU model’s latest 10-day precipitation forecast is not promising. Temps expected to reach into the upper 80’s/upper 90’s this week and will consistently be in the 90’s throughout the 6-10 day period. Ukraine is most concerning, but Russia has become a modest exporter of corn to neighboring destinations in recent years. Extreme heat favors Romania after July 15th . The market’s fixation on Central US weather in July must be expected, but numerous supply issues are present elsewhere across the world. CBOT open interest surged on Monday’s decline with corn up 18,706 contracts, Chicago wheat up 4,477 contracts while soybeans rose 2,648 contracts. New short positions were entered across the CBOT grain complex, except that soybean oil open interest fell 4,218 contracts on short covering. We are closing in on the fundamental summit as US corn and soybean good-to-excellent ratings rose 1%. 24% of the US corn crop is pollinating with 34% of the soybean crop in bloom.
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Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn